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In the Critics this week

In the Critics section of the New Statesman this week, historian David Priestland argues that “the struggle to interpret our history has been won by a complacent liberalism”. He warns that this “is a triumph with serious consequences.” A new form of Whig history has developed, practiced both by those on the centre-right and centre-left, in which “history is seen as a battle between liberalism and totalitarianism.” Andrew Marr’s BBC series History of the World is representative of this trend in that it “assumes, as Margaret Thatcher once put it, that “there is no such thing as society””.

In Books, Mark Leonard, director of the European Council on Foreign Relations, reviews James Mann’s The Obamians “which seeks to paint a portrait of the 44th president’s foreign policy through the prism of his relationships with his closest advisers.” Mann explains how Obama and his “Obamians” wish to develop a doctrine of “low-cost leadership”, the “apotheosis” of which is Libya: “The conflict revealed [Obama’s] willingness to use force and his commitment to humanitarian goals and multilateralism.” Leonard sees Mann building the book up “to a description of a 'pivot to Asia' that could be the beginning of a new era of bipolarity.” If this is so, Obama could come to be seen as “playing a similar role to that played by Harry S Truman in the early stages of the cold war. In that case – like his predecessor – Obama may yet have a doctrine named after him”.

In the Books Interview, Jonathan Derbyshire speaks to children’s author Anthony Horowitz who has just published Oblivion, the last book in the Power of Five series. Horowitz tells Derbyshire that the book was written in the midst of the phone-hacking scandal. As a result, “the three main characters are heavily influenced by the Murdochs.” The author explains that the danger of broaching big issues such as this in children’s literature “is that you forget that your first duty is to entertain, to write books that are page-turners”.

Also in Books: Sarah Churchwell reviews Michael Gorra’s book Portrait of a Novel: Henry James and the Making of an American Masterpiece; Talitha Stevenson reviews Songs of Innocence: the Story of British Childhood by Fran Abrams; and Andrew Adonis looks at Douglas Carswell’s The End of Politics and the Birth of iDemocracy; PLUS: “The Descent”, a poem by Emily Berry.

Elsewhere in the Critics: Rachel Cooke on A History of Horror with Mark Gatiss; Ryan Gilbey gives his verdict on Paul Thomas Anderson’s The Master and the US cut of Stanley Kunbrick’s The Shining; Rachel Haliburton on a London-bound production of Chekhov’s Uncle Vanya; Kate Mossman reviews the album Gonwards by Peter Blegvad and Andy Partridge; and Antonia Quirke denounces the BBC’s cuts to its arts programming.PLUS: The Madness of Crowds by Will Self.

Leader: The unresolved Eurozone crisis

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.